MEDPAC: Hospitals Should Get 1% Payment Update in 2013

Home health care services
The commission repeats prior recommendations that payments for home health services be reduced beginning in 2013. That's because the number of agencies continues to increase, with more than 420 new agencies in 2011, most new agencies are for profit and concentrated in a few states, the volume of services continues to rise, and a larger percentage of beneficiaries receive home health care. Also, payments "have consistently and substantially exceeded costs" with a margin in 2010 of 19.4%.

Inpatient rehabilitation facility servicesCongress should eliminate the update for facilities in fiscal 2013.

Long-term care hospital servicesCongress should eliminate the update to the payment rates for long-term care for fiscal 2013.

Hospice servicesHospice services should receive a .5% increase.

Medicare Part DModify the low-income subsidy for beneficiaries with incomes at or below 135% of poverty to encourage generic drug use in selected therapeutic classes. HHS should determine appropriate therapeutic classifications for the purposes of implementing this policy and review the classes at least every three years.

Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.